What Is Earned Wage Access Compliance?

With the release of the CFPB’s 2025 advisory opinion on earned wage access, employers now have clearer federal guidance for distinguishing EWA models from those that may trigger consumer credit treatment under Truth in Lending Act and Regulation Z. This clarification makes structural model evaluation an even more important part of provider selection.

1. Is the EWA model employer-offered and integrated with payroll settlement?

2. Does the model avoid employee repayment requirements?

3. Does the program avoid fees for employees?

4. How does the model perform under state wage and labor laws?

5. Does the provider offer broader financial wellness tools?
   

These services address the growing financial instability that many workers face, particularly hourly employees who live paycheck to paycheck. But as adoption accelerates, so has the scrutiny, especially in terms of the connection between payroll repayment and wage and hour legal risks. 

Vendor repayment models and possible risk

Choosing certain EWA models may introduce legal, financial, and reputational risk to your organization.

Certain payroll repayment models could create a risk of triggering wage assignment and wage deduction laws at the state level. These laws often involve gray areas. For example:

• Some states, such as California, have wage assignment provisions in both the labor code and the lending code.¹ 

• Some states have both wage deduction and wage assignment laws that could separately be implicated.² 

These laws can impact both the employer and the EWA provider.

There is also a risk, based on the Treasury Department's written guidance, that EWA could be treated as a wage if not structured as a loan. In its FY 2024 Green Book, the Treasury Department has suggested that when EWA is not structured as a loan, it could be viewed as a taxable wage under the constructive receipt doctrine: 

“To avoid treating employees as being in constant constructive receipt of their wages, some employers or third-party payors ignore the constructive receipt issue entirely or treat the arrangement as a loan from the employer to the employee.”

The importance of fee-free EWA 

While the CFPB’s advisory opinion doesn’t define a fee threshold for compliance under federal law, it reinforces that truly fee-free programs — where employees incur no charges for accessing earned wages — will not be subject to Truth in Lending Act and Regulation Z credit requirements and serve wellness goals more effectively.

As an employee benefit, EWA should be part of a holistic wellness strategy

Legacy EWA providers often offer standalone solutions that focus solely on early pay. But financial wellness requires more than a cash advance. EWA should be integrated into a broader financial wellness platform with visibility into savings, credit-building, and progress.

Modern platforms integrate EWA with:

• High-yield savings

• Credit-building tools

• Budgeting insights

Offering these additional financial health tools can better meet employee needs, create measurable progress, and help employees reduce EWA dependency over time. While EWA often offers necessary relief, guiding workers toward savings unlocks the path to lasting financial well-being. 

Action Steps Employers Can Take Now

As an employer, there are questions you can ask to better understand if an EWA model is built to be compliant:

1. Does repayment occur in the bank account, outside of payroll? 

2. Is the EWA program fee-free?

3. Is EWA integrated into broader financial wellness programs? 

Choose a partner built for today’s regulatory environment — and tomorrow’s employee expectations.

For more information, listen to our “State of Earned Wage Access” webinar replay located here. Entering your email will help you stay up to date on ever-evolving EWA legislation so you’re informed about regulatory developments as they happen.